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Wednesday, March 24, 2021

Report from the Health & Human Development Committee Hearing on HB 150 - Delaware Cannabis Legalization

I am Will McVay, Kent County Chair of the LPD, member of the LPD State Board, and our webmaster.  As the only representative of the LPD present at the hearing, I decided to submit this post as my report on the Health & Human Development Committee hearing on HB 150, the bill to legalize cannabis in Delaware.  The State Board of the LPD passed this resolution in support of the legislation.

Many of the advocates made articulate and well reasoned points about the historically racist motivations for cannabis prohibition and the racially disparate impact that prohibition has had since its inception.  They identified the numerous economic benefits of legalization, the increase in liberty and justice that would result from ending prohibition, and the benefits of introducing a legal market to compete with and marginalize the black markets operated by criminal gangs and violent cartels.

It had been my intention when the hearing began to read an excerpt from the State Board resolution to focus on our support for it, given the context of the hearing and the time limits that were imposed on public comments.  After hearing some of the objections from some members of the committee, in particular from Representative Collins, I decided instead to focus my comments on responding to him.

He claimed that the regulatory, licensing, and tax obligations the legal industry would face would make them unable to compete with the illegal market.  He further claimed that cannabis use was "associated" with psychosis and other mental health disorders.  He did not cite his source, but this is an old and tired argument that has been trotted out by opponents of legalization before.  An "association" is not a causal relationship.  Even taken at face value, this claim does not suggest that the use of cannabis CAUSES psychosis, but also leaves open the far more likely possibility that people who already have mental health issues would be more likely to self medicate with cannabis.  As with claims made about the increase in cannabis usage following legalization, it is also likely that under a prohibition regime people without mental health disorders are less likely to honestly self report their cannabis use.

As for the ability of a taxed and regulated industry to compete with a black market, it is true that black markets do not apply to government regulators for licenses.  They do not pay taxes into State coffers.  They do however have to deal with analogous mechanisms in the black market.  Criminal gangs and cartels are violently defensive of their territory.  In order to operate in their markets, lower level dealers are in fact required to enter into operating agreements with these gangs for "protection" that are not functionally dissimilar to licensing and taxes.  Unlike in a legal market, these agreements are enforced not by lawyers, white collar regulators accountable to an elected government, and judges appointed and confirmed to the bench for their fair minded imposition of justice and equity.  Instead they are enforced with violence.  Gratuitous, indiscriminate, and widespread violence that ripples out well beyond the consenting participants in this illegal market.

In addition to the costs associated with illegal markets that seem beyond the knowledge of Representative Collins, illegal markets also have to price in the artificial scarcity created by prohibition.  Whether it is criminals stealing products in thefts that cannot be reported to police and will not be resolved by courts, or the legal activities of law enforcement arresting market participants and seizing their products, the illegal market pays a risk premium to ensure profitability is maintained in spite of this excessive "spillage" resulting from government prohibition.  Beyond this risk premium, simple supply and demand for an illegal product that is actively taken out of distribution by law enforcement suffers from an artificial scarcity that increases prices in a way that even Representative Collins accidentally acknowledged when he shared the anecdote of his college acquaintance who was offered thousands of dollars for a few plants.  Representative Collins also acknowledged that these plants can be grown anywhere by anyone.  Any inflated price resulting from scarcity is purely the result of prohibition and would not affect the legal market.

Legal businesses will have to comply with regulatory, licensing, and tax demands that are anathema to a Libertarian and do impose an additional financial burden on legal business operators.  In comparison with the financial and social costs of the illegal market though, these legal costs could very easily compete with a violent, unreliable, and unstable illegal market.

Additional objections were raised by existing medicinal cannabis businesses like Columbia Care seeking to protect their market share, Delaware Police Chiefs denying the obvious public safety benefits of taking market share from violent criminal gangs, and vehicle "safety" organizations like AAA citing misleading statistics about traffic risks comparing pre-legalization numbers to post-legalization numbers.  Particular to the traffic risks, opponents did not account for the differences in measuring methodologies that led to a significant under-reporting of pre-legalization numbers and no indication of causality for post-legalization numbers.

Clearly, I am a biased reporter of these events.  I have been an advocate for the legalization of cannabis longer than I have been active in the Libertarian Party.  I have been a cannabis user in the past and have suffered under the criminal justice system for it.  Nevertheless it was clear to me, and I will post a recorded video of the committee hearing I made so it can hopefully be clear to everyone else, that advocates knew their facts and presented empirically valid scientific data about the benefits of legalization, and heartfelt anecdotes about their personal, beneficial experiences with cannabis.  Opponents used cherry-picked and misleading data to perpetuate Reefer Madness 85 years after that propaganda film's first introduction and selfishly argued for government protection of their existing market share and function.  The arguments are clear and opponents to this legislation should be held accountable for their votes and the priorities they imply.

Representative Baumbach moved to release the bill.  Representative Minor-Brown seconded.  The bill was released on a vote (counted based on a bad connection from a few Representatives) by 10-5, largely on party lines with Democrats in favor and Republicans opposed.

This is a preliminary count that I will verify and update based on the video and the committee report:
Support:
Bentz, Minor-Brown, Chukwuocha, Johnson, Baumbach, Heffernan, Morrison, Kowalko, Lynn, Smith (?)

Oppose:
Postles, Briggs-King, Hensley, Collins, Shupe (?)

Below is the full 3 hour hearing:

Here is a highlight reel consisting of my testimony, testimony from Dr. David Nathan that I found particularly compelling, and testimony from three talented advocates from the Delaware Cannabis Advocacy Network, Zoë Patchell, John Sybert, and Laura Sharer:


The opinions expressed in this post are my own and have not been reviewed or approved by the State Board prior to publication.

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